Energy groups oppose proposed DOE grid resiliency rule

The Natural Gas Supply Association (NGSA) and 11 other energy organizations have submitted comments to the Federal Energy Regulatory Commission (FERC) in opposition to the U.S. Department of Energy’s (DOE) proposed grid resiliency rule.

The 12 associations represent oil, natural gas, wind, solar, efficiency and other energy technologies. They urged FERC not to adopt DOE’s proposed rule to provide out-of-market financial support to uneconomic coal and nuclear power plants in the wholesale electricity markets overseen by FERC.

In late September, U.S. Secretary of Energy Rick Perry urged FERC to take swift action to address threats to U.S. electrical grid resiliency. He said the proposed rule would ensure the diversity and reliability of generation supply, boost the resilience of the U.S. grid against outages and maximize reserve resource capacity for times of unusually high demand, including severe weather events.

Dena Wiggins, president and CEO of NGSA said, “This proposal not only harms consumers, but also resiliency in the market, and the market itself. DOE has failed to identify and support the existence of a problem, warranting a response.”

According to NGSA, only a small number of interests that would directly benefit from what it called “discriminatory pricing” are in favor of the rule outlined in a DOE notice of proposed rulemaking. The organization said the rule’s beneficiaries failed to provide adequate justification for FERC to approve the rule and that “specific alternative proposals for implementing the bailout of these plants were just as flawed.”

A joint statement from the 12 organizations outlines their objections to the DOE grid resiliency proposal. They noted that grid operators had filed comments refuting claims that the potential retirement of coal and nuclear plants—which could not compete economically—presented “immediate or near term challenges to grid management.”

Pat Jagtiani, executive vice president of NGSA said, “Comments from the regional operators must be heavily weighed by the commission as opposed to comments by parties that have much to gain by the adoption of the DOE proposal, which blatantly discriminates among generators that rely on other fuel sources and inaccurately portrays natural gas.”

He emphasized that the U.S. natural gas supply and delivery system is reliable and that fuel issues aren’t the major cause of generator outages.

“Competitive energy markets are functioning today and providing consumers with dependable service in the most cost-efficient manner,” Jagtiani said. “However, this proposal, if adopted, will not only destroy the functioning of the market but it will also harm consumers.”